My Bank Agreed to Settle My Credit Card Debt But Now Wants More

“Dear Michael,

I have secured loans on a horse trailer and a John Deere tractor which I am current on paying. I have an unsecured master card with Bank of America. I suffered a fire 2 years ago & lost a part of my home, etc. I used my credit card to rebuild with a total of $31,000. I contacted the credit card company recently & advised them that due to layoff & medical expenses, I am unable to repay this balance.

I was advised that Bank of America would settle for 50% or $15,000. I borrowed $15k from my 401k & paid Bank of America. Now Bank of America insists that it has no record of our discussion &/or agreement & that I am on the hook for the remaining balance of $15,000.

Now I’m not sure what to do. I was reading your articles & considering filing bankruptcy, however, is it possible to file bankruptcy on ONLY credit card debt? I don’t want it to affect either the horse trailer or tractor.


Settling credit card bills for less than the balance owed is fairly common. But it rarely happens when you are not considered behind or late already. When was it that you called Bank of America to settle? Were you any number of payments behind before you called in?

Your home, tractor, trailer, other assets, and your income, all are part of determining whether chapter 7 bankruptcy is available to you, or if filing is even advisable.

Because every state treats bankruptcy, your income, and assets differently, you will typically want to connect with a bankruptcy professional directly, in order to determine whether filing makes the most sense.

For you, if that Bank of America debt is the only reason you are thinking about bankruptcy, I would hold off.

Settling a Debt That is Unsettled

Bank of America settles credit card debt. They also send unpaid accounts out to debt collectors to see if they can get their card members to pay. And they also sell off the legal collection rights for some credit card accounts, that remain unpaid long enough, to debt buyers.

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My first impression after reading the information you shared is that some internal bank wires got crossed, or some errors occurred in BofA’s collection pipeline.

Depending on what happened, with who, and when, regarding your settlement, you have some additional options to consider. Aside from the questions I posted above at the opening of my feedback, here are some more for you to answer by posting in the comments below:

Do you know the exact day and time of the settlement call you made with B of A?

Do you know the name of the person you spoke to?

Who is it that is trying to collect from you now, if anyone other than B of A?

If you narrow down the day, time, and person you spoke to, it could prove useful. By filing a debt collection or credit card complaint against Bank of America with the CFPB, it will get sent to someone higher up the food chain at the bank for review and response. And you want people at the bank higher up than customer service reps, and their immediate supervisors, looking at your concerns. The people tasked with responding to the CFPB complaint portal at B of A will be the right eyes to be looking at what happened with your settled account.

You can file your complaint against Bank of America with the CFPB here.

I would encourage you to research and write a chronology of events on a piece of paper, and use that as notes when you file a complaint. Be as thorough as possible. The dates of the calls you had should allow the folks at B of A to pull up the recordings for them to review.

If your file was incorrectly coded, during or after your settlement payment was received, this may all just simply be human error. It happens, and can be quickly resolved.


If the unpaid portion of your credit card debt was placed with an outside agency for collection, it can be yanked back, and coded correctly by the bank after that.

If the unpaid portion of your account was bundled up with other charged off debts, and then sold off to a debt buyer, it could change my feedback a bit once I know the name of the company that bought it.

Anyone concerned with a completed settlement, that inexplicably shows up later as unsettled debt, is welcome to post in the comments below for feedback.

Michael Bovee founded CRN, a unique company offering debt negotiation education and services, in 2004. Bovee has been contributing articles and free reader feedback on this site for several years.

Michael is a debt industry professional who has volunteered his time to help answer reader questions.

If you have a debt related question you’d like to ask our team, just use the online form.

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